Gold prices surged to an all-time high on Wednesday, driven by persistent safe-haven demand as investors remained uneasy over escalating U.S.-China trade tensions and an impairment warning from technology giant Nvidia.
Spot gold jumped 1.7% to reach a record high of $3,283.63 per ounce, while June gold futures peaked at $3,299.52 per ounce, marking an unprecedented level for the yellow metal. The surge in gold prices coincided with growing uncertainty surrounding U.S. economic policy under President Donald Trump, alongside a weakening U.S. dollar. Investors sought refuge in precious metals, dumping U.S. Treasuries in response to heightened market volatility.
Gold Rises Amid Persistent U.S.-China Trade Jitters
Gold’s price spike can largely be attributed to continued safe-haven demand as investors remain on edge over President Trump’s trade policies. Earlier this week, Trump indicated that he was considering additional tariffs on electronics imports and plans to impose new levies on pharmaceuticals. This came amid his administration’s decision to escalate trade pressure on China, with a 145% tariff on Chinese imports, to which China retaliated with a 125% tariff on U.S. goods.
Despite these moves, the Trump administration later clarified that electronics would be exempt from the 145% tariff, while also announcing a 90-day exemption from reciprocal tariffs imposed on other countries. This left markets uncertain about the direction of U.S. trade policy, further fueling the demand for safe-haven assets such as gold and the Japanese yen.
Nvidia Warning Amplifies Market Anxiety
Adding to the growing market unease, Nvidia (NASDAQ: NVDA) issued a warning on Tuesday regarding an anticipated $5.5 billion impairment in its first-quarter earnings. The warning stemmed from new U.S. restrictions on chip exports to China, a move that could significantly disrupt Nvidia’s access to one of its largest markets. This development not only sent shockwaves through the technology sector but also triggered a sharp sell-off in U.S. stock futures, with major tech stocks in Asia also suffering losses.
The potential export restrictions on Nvidia and other chipmakers have sparked concerns about the future of artificial intelligence (AI) development, particularly in China, which has been a key player in the field. The move could provoke retaliatory measures from Beijing, further compounding market anxiety.
Mixed Performance for Other Precious Metals
Amid growing risk aversion, other precious metals showed mixed results. Platinum futures dipped by 0.1%, settling at $968.95 per ounce, while silver futures rose by 0.5%, reaching $32.455 per ounce. Investors’ flight to safety continued to support the upward momentum for gold, while platinum and silver experienced more muted reactions to the ongoing uncertainty.
Copper Prices Decline Despite Strong China GDP
In the industrial metals market, copper prices slipped, even as China reported stronger-than-expected GDP growth for the first quarter of 2025. However, concerns about the long-term impact of the U.S.-China trade war dampened the optimism surrounding China’s economic performance. Analysts anticipate that the effects of the trade conflict will weigh on global economic growth in the coming months, leading to expectations of weaker GDP growth in the future.
Benchmark copper futures on the London Metal Exchange fell by 0.6% to $9,108.85 per ton, while U.S. copper futures declined by 0.5%, trading at $4.5920 per pound.
Outlook
As of April 16, 2025, the gold market remains a focal point for investors, driven by geopolitical tensions, economic uncertainty, and fluctuations in the U.S. dollar. With concerns about trade wars, U.S. economic policies, and the potential for further disruptions in global supply chains, gold’s appeal as a safe-haven asset is likely to persist. Analysts will be closely watching any developments related to U.S. tariffs, tech restrictions, and the broader economic outlook, which could continue to fuel demand for gold and other precious metals.
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